Every October, several hundred lunatics celebrate the anniversary of the Norman Conquest by re-enacting the Battle of Hastings. I’m told that it’s a great show. The people who do it train hard and put on a convincing display of medieval warfare. I keep promising myself that I will go down and watch but then something else always comes up. For some reason, this seems to be a busy time of the year.
But reading about the Norman Conquest got me thinking. It was an early example of a leveraged takeover.
Leveraged buyouts occur when one company wants to take over another but doesn’t have the resources to do so on its own. Those planning the takeover therefore have to convince others that they can mount a successful bid and then squeeze more profit out of the target company than the current management are delivering. The takeover will only succceed if enough money can be raised from other investors. Anyone hoping to mount a leveraged buyout therefore needs both connections and credibility if they are to attract enough funds. Leveraged buyouts enable smaller organisations to take over larger ones but, of course, the investors have to be paid back. The acquiring company and its backers are therefore taking a risk that the venture will succeed and that enough can be wrung out of the new asset to pay back all the hungry creditors.
William of Normandy’s venture in 1066 has many similarities with a leveraged takeover. William wanted the English throne but Normandy was much smaller than England. To conquer his neighbours across the channel he would need to get help from somewhere. He did have a number of things in his favour though. Normandy itself was a strong and well organised state. The Normans had shown themselves to be efficient administrators as well as tough soldiers and successful military tacticians.
England, by contrast, had been weakened by dynastic strife. While it was rich in resources and its warriors were brave, it lacked the governmental structures and military technology of the Norman machine. William was convinced that, if he could just conquer the place, under his leadership it would become a strong and rich country. All he needed to do was convince others that he could do this and that, with him in command, a Norman invasion could conquer England.
William had the reputation and connections to secure backing for his venture. Nobles and knights from France, Brittany, Burgundy, Flanders and Italy joined his expedition, providing troops, ships and money. While it was not as highly leveraged as some recent takeovers, at least half of William’s force came from outside Normandy.
In the event, the invasion was successful and William then had to reward his backers. The English landowners were almost all dispossessed and Norman, French, Flemish and Breton knights were given huge tracts of land as a reward for their support. William re-organised the way England was governed bringing in Norman systems and innovations from elsewhere in Europe. The Domesday Book was a classic post-takeover audit. William wanted a detailed survey of his new acquisition to ensure that the assets would be managed efficiently and the maximum revenue yielded.
Where the analogy with modern leveraged buyouts breaks down is that, rather than asset stripping the country and sailing back home, many of William’s backers chose to settle in England to manage and develop their new estates. Norman, Breton and Flemish families, in time, became English, Scottish and Welsh aristocrats.
But without this backing, William would not have been able to conquer England and seize its throne and its wealth. The key to his success was not only his military genius but his ability to persuade knights from all over Europe to share the risks and rewards of his venture. Perhaps those planning leveraged takeovers should read up on the Norman Conquest. William the Bastard could be an inspiring role model.